We previously reported about compounded pain creams, noting that they generally are extraordinarily expensive and of dubious therapeutic value. We noted the issues presented by those prescriptions issued by physicians who had a financial interest in one or more of the pharmacies filling the orders. We have worked hard to combat the massive increase in compounded pain cream prescriptions in workers’ compensation cases and are pleased to report that utilization of these products have been greatlyreduced. Yet many employers are still paying for these creams, or paying for newer variations on the same themes –creams that cost a great deal of money but have no particular increased efficacy versus existing, FDA approved, and much cheaper creams.
The prescriptions for compounded pain creams and gels were being written for fabrications containing one or more prescription anesthetics, analgesics, sedatives, antidepressants, anti-seizure, muscle relaxant and/or non-steroidal anti-inflammatory (“NSAID”) medications. The five most common ingredients for the mixes sold to workers’ compensation claimants were ketamine, gabapentin, lidocaine, diclofenac, and cyclobenzaprine, although other active ingredients were sometimes thrown in. As previously noted, compounded pain creams are not generally approved by the FDA, and are not supposed to be sold in bulk to indiscriminate groups of patients.
New Study on Efficacy of Compounded Pain Creams
As a result of the dramatic increase in billings for compounded topical pain creams to Tricare, the government-managed health insurance plan covering some active duty and retired military and their family members, and Medicare Part D, in conjunction with news reports and various investigations and prosecutions, the United States Congress mandated a study on the efficacy of these creams.
The double-blind, randomized and placebo-controlled study was performed at Walter Reed National Military Medical Center from August 2015 to February 2018. The results of the study were published in the Annals of Internal Medicine on February 4, 2019.
The research study involved approximately 400 participants aged 18-90, with 51% females and 49% males. They were divided into two groups – one for the compounded pain cream and one for the placebo. Then those participants were separated into groups depending on three types of their history of chronic pain: (1) neuropathic pain or damage to the nerves from shingles or diabetes; (2) nociceptive pain (non-neuropathic) cause by injury to tissue such as burns or sprains; and (3) a “mixed pain” due to damage to the nerves and tissues, such as back pain. The varying body parts were face, back, buttocks, neck, abdomen and chest, groin and/or two extremities, at most. The patients were to apply the creams three times daily and to enter their pain level twice per day.
The researchers independently and without outside assistance prepared the pain creams to contain many of the same drugs being used in the commercially prescribed topical creams.
Once the participants were placed into a specific group by a board certified pain management physician, they were given varying combinations of the creams. Those with neuropathic pain were given cream containing ketamine, gabapentin, clonidine and lidocaine. The group with nociceptive pain used cream containing Ketoprofen, baclofen, cyclobenzaprine and lidocaine. Lastly, the mixed pain group used pain creams containing ketamine, gabapentin, diclofenac, cyclobenzaprine and lidocaine (this combination of active ingredients is the mix most often prescribed to workers’ compensation claimants across Pennsylvania and in other states.)
The study acknowledged that it left out some ingredients that are approved for pain, such as capsaicin, a pepper, because it is readily recognizable and would defeat the double-blinding process. Both the subjects of the study and their caregivers were unaware whether they received the compounded cream or the placebo.
The study found there was no difference in worst pain score and, more importantly, no reduction in oral medications for the groups using the compounded pain creams for any type of pain classification from the groups using the placebos after 3 months of use.
The conclusion of the study was that compounded pain creams were no better than placebo creams and their higher costs compared with approved compounds should curtail routine use.
This was an important study for employers and workers’ compensation insurers, as well as the medical community. The prescribing physicians/owners of the compounding pharmacies have been arguing that the high cost of compounded pain creams is justified because it will lead to a reduction in the dispensing of addictive narcotics and other powerful medications. Our experience (consistent with this new report) is that workers’ compensation claimants generally do not have significant reductions in use of oral narcotic or other medications, even when these compounded pain creams were being used.
A Change in Strategy
As the evidence against the use of compounded pain creams grows, and as successful challenges in Fee Review and Utilization Review under the Pennsylvania Workers’ Compensation Act are mounted, the compounding pharmacies have begun to switch strategies. Instead of fighting to continue the original multi-component compounded pain creams, some have come up with other “unique” formulations, based on only one or two ingredients, with extraordinarily expensive pricing, under the Pennsylvania Workers’ Compensation Act.
Most of the new prescriptions are for single ingredient “compounded” topical medications which include 5% Lidocaine or 1.5% diclofenac in either a cream or lotion or drops. Each of these two ingredients have shown efficacy in limited situations and are approved by the FDA for use as topical solutions for evoked neuropathic pain and knee osteoarthritis, respectively.
Compounding pharmacies are not regulated by the FDA, and, as early as the 1990s, there was concern that these pharmacies were producing mass quantities using bulk products without oversight. The concern was that the pharmacies were manufacturing drugs under the guise of compounding to take advantage of the FDA’s traditional lenience toward compounding as an end-run around the new drug approval, adulteration, and misbranding provisions of the Food Drug & Cosmetics Act (“FD&CA”).
The FDA and Congress, in 1997, added Section 503A to the FD&CA via the Food and Drug Administration Modernization Act, (amended by the Drug Quality and Security Act in 2013) to describe conditions that must be satisfied for human drug products compounded by either a licensed pharmacist in a state-licensed or federal facility, or by a licensed physician. These conditions must be met to qualify for exemptions from (1) current good manufacturing practice (CGMP) requirements; (2) labeling drugs with adequate directions for use; and (3) approval of drugs under new drug applications (NDAs) or abbreviated new drug applications (ANDAs).
One of the conditions that must be met for a compounded drug product to qualify for the exemptions under Section 503A of the FD&CA is that it must be compounded by a licensed pharmacist or a licensed physician that “does not compound regularly or in inordinate amounts (as defined by the Secretary) any drug products that are essentially copies of a commercially available drug.”  The main reason for this requirement is that “the restriction against compounding drug products that already are commercially available would create significant health risks because patients would be unnecessarily exposed to drug products that have not been shown to be safe and effective and that may have been prepared under substandard manufacturing conditions.” In addition, this “protects the integrity and effectiveness of the new drug and abbreviated new drug approval processes that Congress put in place to protect patients from unsafe, ineffective, or poor quality drugs.”
Both Lidocaine 5% and Diclofenac 1.5%(Pennsaid) are available in approved and commercially available products with prices hundreds, if not thousands, of dollars less than what is being prescribed to the workers’ compensation claimant and billed to the employer or the carrier. We are advising employers and insurers alike to look carefully at whether the same or similar drugs are available in existing FDA approved preparations, or even over-the-counter (“OTC”) preparations, and to consider strategies to re-code(9) the bills submitted to match the lowest priced, already available prescription or OTC products.
We will continue to monitor developments and will provide updates regarding unnecessarily expensive and/or ineffective topical applications.
 CompoundedTopical Pain Creams to Treat Localized Chronic Pain:A Randomized Controlled Trial. Robert E. Brutcher, PharmD, PhD; Connie Kurihara, RN; Mark C. Bicket, MD;Parvaneh Moussavian-Yousefi, PharmD; David E. Reece, MD; Lisa M. Solomon, BS;Scott R. Griffith, MD; David E. Jamison, MD; and Steven P. Cohen, MD, . Ann InternMed. 2019; 170(5):309-318. Published at www.annals.org on 5 February 2019.
 The study was funded by the Centers for Rehabilitation Sciences Research, the Defense Health Agency and the U.S. Department of Defense. Over 40% of the participants were active duty military personnel.
 Notably, the researchers did not comment on any of the investigations being conducted or about the resulting indictments concerning the reasons for selection of the specific active ingredients that we identified previously. Many of our clients have tried to use the UR process to challenge use of compounded pain creams but, as noted in our earlier materials, we believe that there are often better ways to fight back against compounded pain creams. Unfortunately, despite reports such as the subject of the article, URO’s for some reason continue to endorse the concept that the creams are “reasonable and necessary.”
 See Compounded Topical Pain Creams, supra.
 Following a 2012 incident involving several deaths due to inadequate safeguards of products from a New England Compounding Pharmacy, Congress enacted the “Compounding Quality Act” amending Subchapter A of Chapter V of 21 U.S.C. § 351 et seq.
 See section 503A (b)(1)(D), 21 U.S.C. § 353a.
 Compounded Drug Products that are Essentially Copies of a Commercially Available Drug Product Under Section 503A of the Federal Food, Drug and Cosmetic Act: Guidance for Industry, U.S. Department of Health & Human Services, Food & Drug Administration, Center for Drug Evaluation and Research, Office of Compliance, January 2018, Compounding. https://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/default.htm
 If you re-code there are specific regulations in Pennsylvania that must be followed exactly in order to successfully change to another code with a lower average wholesale price.